Memmer v. United States

In the United States Court of Federal Claims

No. 14-135L

(Filed: May 20, 2021)

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JEFFREY MEMMER, GILBERT *

EFFINGER, LARRY GOEBEL AND *

SUSAN GOEBEL, OWEN HALPENY, *

MATTHEW HOSTETTLER, JOSEPH *

JENKINS, MICHAEL MARTIN AND RITA *

MARTIN, McDONALD FAMILY FARMS *

OF EVANSVILLE, INC., REIBEL FARMS, *

INC., JAMES SCHMIDT AND ROBIN * Motion for Reconsideration; Rails-to-Trails;

SCHMIDT, * Indiana Law; Extent of Taking; Cost-to-

* Cure Damages

Plaintiffs, *

*

v. *

*

THE UNITED STATES, *

*

Defendant. *

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Thomas S. Stewart, Kansas City, MO, for plaintiffs.

David L. Weigert, United States Department of Justice, Washington, DC, for defendant.

OPINION AND ORDER

SWEENEY, Senior Judge

In this Trails Act case, plaintiffs own real property adjacent to railroad lines in

southwestern Indiana. The court held a trial, after which it concluded that defendant was liable

to pay all but one plaintiff just compensation for a temporary taking resulting from defendant’s

authorization of the conversion of the railroad lines into recreational trails via a Notice of Interim

Trail Use or Abandonment (“NITU”). See generally Memmer v. United States, 150 Fed. Cl. 706

(2020). Thereafter, plaintiffs timely filed a motion for reconsideration of the court’s

determination of the extent of the taking, and the parties identified a dispute regarding whether

one of the plaintiffs, Joseph Jenkins, is entitled to cost-to-cure damages. The parties have fully

briefed both issues. As explained below, the court denies plaintiffs’ motion for reconsideration

and concludes that Mr. Jenkins is not entitled to cost-to-cure damages.

I. PLAINTIFFS’ MOTION FOR RECONSIDERATION

In their motion for reconsideration, plaintiffs contend that the court erred, as a matter of

law, in concluding that the taking triggered by the issuance of the NITU by the Surface

Transportation Board (“Board”) ceased upon the expiration of Indiana Southwestern Railway

Company’s (“Indiana Southwestern”) authority to abandon its lines. Specifically, they maintain

that because Indiana Southwestern abandoned its lines under state law while the NITU was

pending and then declined to file the federally mandated notice of consummation of

abandonment after the NITU expired, the regulation requiring the filing of the notice prevents

the vesting of their state law property interests and thus prolongs the taking. Defendant responds

that plaintiffs are merely reasserting arguments raised in their posttrial briefs, and that in any

event, plaintiffs’ position lacks merit.

A motion for reconsideration under Rule 59(a) of the Rules of the United States Court of

Federal Claims (“RCFC”) is a request for extraordinary relief and is not to be used by a

dissatisfied party to relitigate the case. See Caldwell v. United States, 391 F.3d 1226, 1235 (Fed.

Cir. 2004); Four Rivers Invs., Inc. v. United States, 78 Fed. Cl. 662, 664 (2007); Fru-Con Constr.

Corp. v. United States, 44 Fed. Cl. 298, 300 (1999), aff’d per curiam, 250 F.3d 762 (Fed. Cir.

2000) (unpublished table decision). Consequently, such a motion “does not provide an occasion

for a party ‘to raise arguments that it could have raised previously, but did not’” or to “reassert

arguments that the Court already has considered.” Four Rivers Invs., Inc., 78 Fed. Cl. at 664

(quoting Browning Ferris Indus., Inc. & Subsidiaries v. United States, No. 05-738T, 2007 WL

1412087, at *1 (Fed. Cl. May 10, 2007)). However, the court may grant a motion for

reconsideration if the moving party establishes, as relevant here, a clear error of law in the

underlying decision. Biery v. United States, 818 F.3d 704, 711 (Fed. Cir. 2016). “The decision

whether to grant reconsideration lies largely within the discretion of the [trial] court.” Yuba Nat.

Res., Inc. v. United States, 904 F.2d 1577, 1583 (Fed. Cir. 1990); accord Biery, 818 F.3d at 711.

As an initial matter, the court agrees with defendant that in their motion for

reconsideration, plaintiffs are advancing arguments they previously raised, or should have raised,

in their posttrial briefs. A comparison of plaintiffs’ summary of their argument before and after

the court issued its trial decision supports this conclusion. In their opening posttrial brief,

plaintiffs contended:

Plaintiffs’ reversionary interests are still being blocked. The governmental

action(s) which block[] the Plaintiffs’ reversionary interests in this case are the

issuance of the NITU, which originally triggered the taking, in combination with

the requirement to consummate abandonment under 49 C.F.R. § 1152.29(e)(2)

when state law abandonment has already occurred.

Pls.’ Posttrial Br. 62. Similarly, plaintiffs contend in their motion for reconsideration:

[S]tate law abandonment occurred during the pendency of the NITU, the

government’s regulation requiring the consummation of abandonment under

federal law after state law abandonment already occurred amounts to the

continuation of the taking, and the Plaintiffs’ reversionary interests are still being

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blocked by the combination of the NITU and the regulation requiring

consummation under federal law.

Pls.’ Mot. 2. There is no substantive difference between the two summaries. Moreover, in

articulating the three reasons why they consider the court’s conclusion that the taking was

temporary to be legally erroneous, plaintiffs reassert arguments they advanced in their posttrial

briefs:

Motion for Reconsideration Posttrial Briefs

“In this case, the railroad’s failure to “After the railroad made their decision

consummate abandonment necessarily to abandon during the summer of 2010,

means that the taking continued long . . . the [Board] . . . granted permission

beyond the expiration of the NITU. to abandon in the NITU on May 23,

The Plaintiffs’ reversionary interests 2011, and the railroad has failed to

are still being blocked under these consummate abandonment after the

facts because the governmental NITU expired on November 11, 2013.

regulation requiring the railroad to . . . Since [Indiana Southwestern] has

consummate abandonment under intentionally failed to consummate

federal law means that the Plaintiffs’ abandonment after state law

reversionary interests are still being abandonment has occurred, the taking is

blocked because state law continuing and the Plaintiffs’

abandonment has already occurred.” reversionary interests are still being

Pls.’ Mot. 6. blocked.” Pls.’ Posttrial Resp. 47-48.

“[I]t is the Board’s continuing “The fact that federal law abandonment

jurisdiction over the line, obviously has not occurred but the government is

due to the railroad’s failure to still maintaining jurisdiction over the

consummate abandonment after state corridor, despite the fact that state law

law abandonment has already abandonment has occurred, is exactly

occurred, that is the taking—that is no why the taking is still continuing under

different than the [Board’s] continuing the Trails Act.” Pls.’ Posttrial Br. 80.

jurisdiction over the line when a trail

use agreement is reached, because that

is exactly what railbanking is.” Pls.’

Mot. 7.

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“The federal preemption of state law, “[T]he government has the power to

which the federal government has a preempt abandonment [by issuing a

right to do, is exactly why there is a NITU] but the blocking of Plaintiffs’

taking when the NITU is issued and is reversionary interests results in a taking

exactly why the taking continues whether federal law preempts state law

when the Plaintiffs’ reversionary on the issue of abandonment or whether

interests are still being blocked.” Pls.’ the railroad has actually consummated

Mot. 7. abandonment under federal law or not.

. . . [T]he taking is continuing because

the Plaintiffs’ reversionary rights are

still being blocked . . . .” Pls.’ Posttrial

Resp. 43.

In short, plaintiffs are merely attempting to relitigate the issue of the extent of the taking, which

is a sufficient reason to deny their motion for reconsideration.

However, the court would also deny plaintiffs’ motion for reconsideration on the merits.

To begin, plaintiffs’ characterization of the court’s conclusion regarding the effect of Indiana

Southwestern’s failure to file a notice of consummation of abandonment reflects an apparent

misreading of the court’s decision. The court did not, as plaintiffs assert, state that Indiana

Southwestern’s failure to file such a notice affected “whether a taking occurred.” See Pls.’ Mot.

5-6. Indeed, the court clearly stated throughout its decision that a taking in a Trails Act case is

triggered by government action that prevents the vesting of state law property interests. See

Memmer, 150 Fed. Cl. at 716, 729, 751; accord id. at 752 (quoting the proposition in Navajo

Nation v. United States, 631 F.3d 1268, 1274 (Fed. Cir. 2011), that “[a] takings claim must be

predicated on actions undertaken by the United States, not [a third party]”); see also id. at 748

(“[T]he Board’s issuance of the NITU injured plaintiffs by compelling the continuation of

Indiana Southwestern’s easements––despite Indiana Southwestern’s expressed intent to abandon

the lines––and preventing them from acquiring fee simple interests in the underlying land.”). In

contrast, the court observed, a railroad company’s actions (or inaction) affect only the extent of

the taking, in other words, whether the taking is permanent or temporary. See id. at 750 (“In

Trails Act cases, the railroad company’s actions subsequent to the Board’s issuance of a NITU

dictate the extent of the taking and, therefore, the amount of just compensation owed by the

government. . . . First, when the issuance of a NITU leads to a trail-use agreement and,

therefore, the conversion of a railroad-purposes easement to a trail, the taking is permanent

because the adjacent fee owners are prevented indefinitely from using the land burdened by

easement. Second, when the issuance of a NITU does not lead to a trail-use agreement, the

NITU expires, and the railroad company decides to fully abandon its line by filing a notice of

consummation, the taking is temporary because the adjacent fee owners recover the land

burdened by easement upon the abandonment by operation of state law.” (citations omitted)).

Consistent with these unambiguous statements, the court concluded that after the deadline for

finalizing abandonment expired without Indiana Southwestern filing the required notice of

consummation of abandonment, the federal government no longer controlled the continuation of

the railroad-purposes easements since neither the NITU nor the regulation requiring the filing of

a notice of consummation of abandonment remained operative. Id. at 752.

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Plaintiffs’ argument that “[i]t simply cannot be that state law abandonment occurred and

yet no taking occurred,” Pls.’ Mot. 6, is not persuasive. A taking did occur in this case––

triggered by the issuance of the NITU, which blocked the vesting of plaintiffs’ state law property

interests by prolonging the railroad-purposes easements. See Memmer, 150 Fed. Cl. at 750;

accord Caquelin v. United States, 959 F.3d 1360, 1367 (Fed. Cir. 2020). Under the binding

precedent of the United States Court of Appeals for the Federal Circuit (“Federal Circuit”),

“[t]he issuance of the NITU is the only government action in the railbanking process that

operates to prevent abandonment of the corridor and to preclude the vesting of state law

reversionary interests in the right-of-way.” Caldwell, 391 F.3d at 1233-34 (emphasis added).

Indeed, the Federal Circuit has never held that the regulation requiring a railroad company to file

a notice of consummation of abandonment––which is effective (1) as soon as the Board

publishes its notice in the Federal Register indicating that a railroad company filed a notice of

exemption from abandonment proceedings and (2) regardless of whether the Trails Act is

invoked––“operates to prevent abandonment of the corridor and to preclude the vesting of state

law reversionary interests,” id. at 1233, either independently or in conjunction with an expired

NITU. 1 Consequently, the court is precluded from holding that the regulation serves as the basis

for a taking, as plaintiffs urge. See Pls.’ Mot. 10 (“[T]he regulation requiring consummation of

abandonment after state law abandonment has occurred is a taking just like when a railroad

corridor is railbanked.”). When the NITU expires, and a railroad company is no longer able to

finalize its abandonment, the taking ends. 2 See Memmer, 150 Fed. Cl. at 752; see also Caldwell,

391 F.3d at 1235 (observing that a “taking may be abandoned . . . by the termination of the

1

Plaintiffs observe that “[a]t the end of every NITU, the NITU states that if the railroad

is unsuccessful in negotiating a trail use agreement, it can then consummate the abandonment

under federal law,” and thus conclude that “the regulatory process associated with the Trails Act

intervenes and blocks [their] reversionary rights under state law.” Pls.’ Reply 18. Although the

regulatory abandonment process can technically be described as being “associated with the Trails

Act,” any suggestion that the regulation requiring the filing of a notice of consummation of

abandonment is unique to situations in which an abandonment is delayed due to the issuance of a

NITU is erroneous. As reflected by the evidence in the trial record, when the Board publishes a

notice in the Federal Register acknowledging the filing of a notice of exemption from

abandonment proceedings, an action it takes regardless of whether the Trails Act will be

invoked, it states the requirement that a notice of consummation of abandonment must be filed

within one year to finalize the abandonment. Memmer, 150 Fed. Cl. at 732-33.

2

Moreover, it might be contended that once Indiana Southwestern lost the authority to

fully abandon its lines, the requirements for abandonment under Indiana law were no longer

satisfied. As explained in the trial decision, (1) the Indiana abandonment statute’s requirement

for a “certificate of public convenience and necessity relieving the railroad” company of its

obligation to furnish service on the line is satisfied by “the document issued by the Board that

authorizes abandonment––the . . . notice recognizing that a railroad company has invoked a class

exemption,” Memmer, 150 Fed. Cl. at 749; (2) “by issuing the NITU, the Board authorized

Indiana Southwestern to abandon the lines, relieving it of its common carrier obligation to

provide rail service,” id.; and (3) “Indiana Southwestern’s authority to abandon the lines

expired” when the company failed to file a notice of consummation of abandonment after the

expiration of the NITU, id. at 752.

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NITU”); Barclay v. United States, 443 F.3d 1368, 1374 (Fed. Cir. 2006) (“Federal law dictates

when abandonment occurs. Thus, [the plaintiff] is incorrect that state law governs the timing of

the abandonment. Abandonment cannot occur until authorized by federal law, and the NITU

precludes abandonment and the reversion that would follow if abandonment were

consummated.” 3).

The reconsideration decision in Farmer’s Cooperative Co. v. United States provides

further support for the court’s holding. 4 That case involved a series of four NITUs: the first

NITU covered two railroad corridors, the second NITU covered one of the two corridors, and the

third and fourth NITUs covered the other corridor. Farmer’s Coop. Co. v. United States, 98 Fed.

Cl. 797, 800-01, recons. denied, 100 Fed. Cl. 579 (2011). There was a three-month gap between

the vacatur of the first NITU and the issuance of the second NITU, and a four-month gap

between the vacatur of the first NITU and the issuance of the third NITU. Id. Upon the vacatur

of the first NITU, state law requirements for abandonment were satisfied, and during the gap in

time between the first two NITUs, the railroad company did not file a notice of consummation of

abandonment. Id. at 806. However, the court did not, in its original merits decision, address

either of these facts in reaching its conclusion that there were two temporary takings, one

spanning from the issuance of the first NITU to the expiration of the second NITU, and the other

spanning from the issuance of the first NITU to the expiration of the fourth NITU. 5 Id. at 806-

07.

In their motion for reconsideration, the plaintiffs in Farmer’s Cooperative observed that

notwithstanding the railroad company’s obvious intent to abandon the two railroad corridors, the

company did not file a notice of consummation of abandonment after the expiration of the

NITUs for either corridor, and therefore the corridors remained under the jurisdiction of the

Board. 100 Fed. Cl. at 581. They argued that the “ongoing jurisdiction” of the Board

“constitute[d] a permanent taking, rather than a temporary one.” Id. The court rejected this

argument:

3

It is in this sense that the court used the term “preempts” in its trial decision. See

Memmer, 150 Fed. Cl. at 752.

4

Neither party mentioned this decision, or the underlying merits decision, in their

posttrial briefs.

5

This court’s conclusion that the temporary taking ended on the deadline for the railroad

company to file a notice of consummation of abandonment, rather than upon the expiration of the

NITU, is in conflict with the holding of Farmer’s Cooperative. See also Balagna v. United

States, 145 Fed. Cl. 442, 444 (2019) (holding, in a case in which the deadline for filing a notice

of consummation of abandonment had not yet expired, that “the taking effected by the NITU’s

issuance ends upon the NITU’s expiration”). Defendant, in its response to plaintiffs’ motion for

reconsideration, suggests that the court should amend its trial decision to hold that the taking

ended when the NITU expired. However, as plaintiffs note, defendant did not move for

reconsideration of the court’s decision, and therefore its suggestion is not properly before the

court.

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In a rails-to-trails takings case, the issue is not whether [Board] jurisdiction

continues or whether the railroad retains a property interest upon the expiration of

a NITU, but whether the Government has taken any action that forestalls the

vesting of the underlying landowners’ property rights. With the expiration of all

of the NITUs applicable to the two rail corridors, there is no longer any action by

the United States to which Plaintiffs can point that impedes the realization of any

property interests they would otherwise obtain under state law.

Id. at 583. Although it recognized the plaintiffs’ “quandary,” the court remarked that it was not

its “province to . . . address how [the plaintiffs] might best extricate themselves from the

consequences of the railroad’s failure to file the requisite notice of consummation, even though

its abandonment of the rights-of-way seems evident under state law.” Id. at 584.

Finally, the court must address plaintiffs’ contention, raised throughout their motion for

reconsideration, that the Preseault decisions compel the conclusion that the regulation requiring

the filing of a notice of consummation of abandonment triggered a taking in this case. See Pls.’

Mot. 6 (“[S]tate law abandonment prior to the NITU is one of the independent prongs of the test

for liability for a rails-to-trails taking as definitively established as prong 3 of Preseault II.”), 8

(“[T]he notion that federal preemption of railroad abandonments somehow precludes a taking

was directly rejected in Justice O’Connor’s concurring Opinion in Preseault I, and that principle

was then adopted by the Federal Circuit in Preseault II and all of its progeny.”), 10 (“[T]he rule

of law specifically identified by Justice O’Connor in Preseault I [is] that a taking occurs under

the federal regulation requiring consummation of federal law abandonment after state law

abandonment has occurred.”). The Preseault case involved the conversion of a railroad corridor

to a trail in Vermont. See Preseault v. Interstate Com. Comm’n (“Preseault I”), 494 U.S. 1, 9-10

(1990); Preseault v. United States (“Preseault II”), 100 F.3d 1525, 1529-31 (Fed. Cir. 1996) (en

banc). The issue before the United States Supreme Court (“Supreme Court”) in Preseault I was

the constitutionality of the statute permitting such conversions, and the Court ultimately

concluded that the statute was constitutional. 494 U.S. at 4-5. In a concurring opinion, Justice

O’Connor sought to “express [her] view that state law determines what property interest

petitioners possess and that traditional takings doctrine will determine whether the government

must compensate petitioners for the burden imposed on any property interest they possess.” Id.

at 20 (O’Connor, J., concurring); accord id. at 21 (“Determining what interest petitioners would

have enjoyed under Vermont law, in the absence of the [Interstate Commerce Commission’s]

recent actions, will establish whether petitioners possess the predicate property interest that must

underlie any takings claim.”).

After the Supreme Court issued its decision, the plaintiffs filed a takings suit in this court.

See Preseault II, 100 F.3d at 1530. On appeal, the Federal Circuit concluded that the federal

government was liable to pay plaintiffs just compensation. Id. at 1529. In the section of that

decision captioned “The Property Interests,” the Federal Circuit observed that the parties

“sharply dispute[d]” whether the plaintiffs “possess[ed] the property interest they claim [was]

taken.” Id. at 1533 (quoting Preseault I, 494 U.S. at 20 (O’Connor, J., concurring)). It then

stated that there were three “determinative issues” bearing upon whether the plaintiffs had such a

property interest:

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(1) who owned the strips of land involved, specifically did the Railroad . . .

acquire only easements, or did it obtain fee simple estates; (2) if the Railroad

acquired only easements, were the terms of the easements limited to use for

railroad purposes, or did they include future use as public recreational trails; and

(3) even if the grants of the Railroad’s easements were broad enough to

encompass recreational trails, had these easements terminated prior to the alleged

taking so that the property owners at that time held fee simples unencumbered by

the easements. 6

Id. (footnote added). With respect to the third inquiry, the plaintiffs maintained that because

“under Vermont law the original easements were abandoned, and thus extinguished, in 1975 . . . ,

the State could not, over ten years later in 1986, have re-established the easement even for the

narrow purposes provided in the original conveyances without payment of the just compensation

required by the Constitution.” Id. at 1544-45. The Federal Circuit agreed, but observed that “the

question of abandonment is not the defining issue, since whether abandoned or not the

Government’s use of the property for a public trail constitutes a new, unauthorized, use.” Id. at

1549. Then, in the section of the decision captioned “The Taking,” the Federal Circuit indicated

that there were two ways in which a taking might occur under the facts presented: (1) if the

railroad-purposes easements existed at the time the federal government authorized the use of the

railroad corridor as a trail, the authorization would “effect a taking of a new easement for [the]

new use,” or (2) if the railroad-purposes easements were abandoned (and therefore extinguished)

under state law before the federal government authorized the use of the railroad corridor as a trail

such that the plaintiffs owned the underlying property in fee simple, the authorization constituted

a “taking of the right of exclusive possession that belonged to the [plaintiffs] as an incident of

their ownership of the land.” Id. at 1550-51.

Applying the Preseault precedent to this case, the court concluded that Indiana

Southwestern acquired easements over most of the parcels at issue, that those easements were for

railroad purposes, and that the easements had not been abandoned prior to the NITU. See

Memmer, 150 Fed. Cl. at 724-27. With respect to the third inquiry of the property-interest test,

the court stated:

The trial record lacks any evidence that Indiana Southwestern or its predecessors

abandoned the easements, or that the easements were otherwise terminated, prior

to the issuance of the NITU. Thus, the court concludes that at the time of the

alleged taking, the parcels held in fee simple by adjacent landowners were

encumbered by the easements.

6

The “alleged taking” was not a NITU, but was instead the conversion of a railroad

corridor to a trail, because the agreement to allow the corridor to be used as a trail predated the

Interstate Commerce Commission’s order allowing the discontinuation of railroad service.

Preseault II, 100 F.3d at 1549-52; see also id. at 1552 (“Whether, at the time a railroad applies to

abandon its use of an easement limited to railroad purposes, a taking occurs under an [Interstate

Commerce Commission] order to ‘railbank’ the easement for possible future railroad use, and

allowing in the interim for use of the easement for trail purposes, is a question not now before us.

We offer no opinion at this time on that question.”).

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Id. at 727. Because the court determined that the railroad-purposes easements were not

abandoned prior to the issuance of the NITU, the alternative basis described by the Federal

Circuit in Preseault II for concluding that a taking occurred––abandonment under state law

before the government authorized the conversion of a rail corridor into a trail––was not

implicated. Although the requirements for state law abandonment were satisfied prior to Indiana

Southwestern regaining the ability to consummate its abandonment, 7 the federal government did

not grant new trail-use authority (in other words, a new NITU) that would constitute a new

taking of plaintiffs’ state law property interests. The court therefore held that the taking

concluded once the federal government was no longer responsible for prolonging the railroad-

purposes easements. Id. at 752. This holding does not conflict with the decisions in Preseault I

and Preseault II.

In short, plaintiffs have not identified a clear error of law requiring the court to alter its

conclusion that defendant is liable for a temporary taking that ceased when Indiana

Southwestern’s authority to abandon the lines ended, which constitutes an alternative basis for

denying their motion for reconsideration.

II. COST-TO-CURE DAMAGES

The other posttrial issue that the court must resolve is whether one of the plaintiffs, Mr.

Jenkins, is entitled to cost-to-cure damages as part of his just compensation. In its trial decision,

the court indicated that the principal amount of just compensation owed to Mr. Jenkins needed to

be recalculated to account for a temporary taking lasting 2.63 years. Id. at 760. In a

subsequently filed joint status report, the parties disagreed on the principal amount due to Mr.

Jenkins: plaintiffs contended that the proper amount is $1802 and defendant contended that the

proper amount is $202. The $1600 difference between the two amounts represents the cost to

cure the damages that would be caused by the construction of a trail, as determined by plaintiffs’

expert appraiser, David Matthews. Because the parties had not addressed this issue in their

posttrial briefs or during closing arguments, the court afforded them the opportunity to brief the

issue in conjunction with the briefing on plaintiffs’ motion for reconsideration.

To calculate the principal amount of just compensation owed to each plaintiff, Mr.

Matthews used the accepted approach of comparing the value of a parcel before and after the

government’s imposition of an easement and then adding any damages caused by the imposition

of the easement. See id. at 754-58 (describing Mr. Matthews’s approach), 759 (observing that

Mr. Matthews’s approach has been endorsed by the court and defendant in other cases). Mr.

Matthews, in valuing plaintiffs’ parcels in the “after” condition, presumed that a trail would be

constructed and determined the cost to cure any damages caused by the trail’s existence. Id. at

756. The parties dispute whether it is appropriate to award such damages given that a trail-use

agreement was not executed and a trail was not constructed.

7

Defendant, in its response to plaintiffs’ motion for reconsideration, maintains that the

court erred in concluding that the state law abandonment requirements were satisfied. However,

as noted previously, defendant did not seek reconsideration of the court’s decision, and therefore

its contention is not properly before the court.

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Plaintiffs maintain that it was proper for Mr. Matthews to include the cost to cure the

damages caused by the existence of a trail in the principal amount of just compensation owed to

Mr. Jenkins. They assert that under the appraisal standards applicable in Trails Act cases, a

parcel must be valued with the assumption that a trail was built, and the compensation owed to

the landowner must include damages caused by the existence of the trail. Plaintiffs further assert

that in accordance with these standards, Mr. Matthews determined that the damage caused by a

trail running along the rear boundary of Mr. Jenkins’s residential parcel could be cured by the

construction of a privacy fence, and concluded that Mr. Jenkins was entitled to recover the cost

for such construction. Defendant responds that Mr. Jenkins is not entitled to cost-to-cure

damages because he did not suffer a permanent loss of value to the remainder of his property as a

result of the taking, and because the cost to build the privacy fence is more than the damages

owed for the diminution of value caused by the taking.

During trial, Mr. Matthews testified that he calculated the principal amount of just

compensation owed to plaintiffs in accordance with the appraisal standards and guidance set

forth in the Interagency Land Acquisition Conference’s Uniform Appraisal Standards for Federal

Land Acquisitions (“Yellow Book”). 8 See Tr. 479-82 (Matthews). See generally JX 38 (the

Yellow Book). In particular, Mr. Matthews explained that under those standards, (1) a parcel

must be valued in the “before” and “after” conditions as of the date of the taking, Tr. 357-58,

495-97 (Matthews); (2) he was required to assume, when determining the value of a parcel in the

“after” condition, that the trail had been built, id. at 317-18, 496-97, 500, 560-61; and (3)

compensation owed to a landowner must account for damages caused by the existence of the

trail, id. at 339, 564, 567-69. See also PX 22 at 36 (“At the time of the taking, . . . it was not

understood that the take would be temporary and so the motivations of the parties involved

would reflect the assumption that it was a permanent take. Thus it is assumed the property

owner would construct a privacy fence along the rear property line to mitigate the loss of privacy

and potential trespass from rail/trail traffic.”). Compliance with these requirements, he

explained, would ensure that a landowner was fully compensated for the federal government’s

appropriation of the property underlying the railroad-purposes easement. See id. at 318

(explaining that his approach “allows the appraiser to measure any damages or benefits” caused

by the taking, and that an appraiser who did not account for damages or benefits would “not have

measured the total impact on the property”), 339 (“[I]f you just take the rent loss, it does not

address damages or benefits. It says in the Yellow Book you need to address damages and

benefits. [Only measuring rent loss] underestimates the property.”).

Mr. Matthews is a knowledgeable and experienced appraiser, and the evidence in the trial

record reflects that his cost-to-cure-damages analysis conforms to the appraisal standards set

8

A complete description of Mr. Matthews’s approach is set forth in the court’s trial

decision. See Memmer, 150 Fed. Cl. at 754-60. This section includes only the facts relevant to

the cost-to-cure-damages issue, which are derived from the transcript of testimony elicited

during trial (“Tr.”) and the exhibits admitted into evidence as part of the trial record (“PX” or

“JX”). Citations to the trial transcript will be to the page number of the transcript and the last

name of the testifying witness.

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forth in the Yellow Book. 9 However, Mr. Matthews’s adherence to those standards does not

mean that they should be applied to the facts of this case as a matter of law.

A taking in a Trails Act case accrues on the date the Board issues the NITU. See

Caldwell, 391 F.3d at 1235. Although it may not be known whether the taking will be

permanent or temporary when the NITU is issued, id. at 1234, an appraiser must still use that

date when determining the value of the property taken, Tr. 357-58, 495-97 (Matthews); JX 38 at

20-21. In most cases, landowners are awarded just compensation, either by the court or through

settlement, after the NITU has expired and it is known whether the taking is permanent (due to

the execution of a trail-use agreement) or temporary. In other words, events occurring after the

date of valuation affect the amount of just compensation a landowner will be paid.

In this case, Indiana Southwestern and the putative trail sponsor did not execute a trail-

use agreement during the pendency of the NITU, the NITU expired on November 8, 2013, and

Indiana Southwestern did not file a notice of consummation of abandonment by the January 7,

2014 regulatory deadline. Thus, to the extent that the taking was temporary and ended on or

before January 7, 2014, an adjacent landowner would not have been injured by the existence of a

trail––indeed, after January 7, 2014, there was no possibility that a trail could be constructed as a

result of the issuance of the NITU. Because the purpose of just compensation is to put a

landowner “in the same position monetarily as he would have occupied if his property had not

been taken,” United States v. Reynolds, 397 U.S. 14, 16 (1970), it would be improper to award

Mr. Jenkins compensation for mitigating damages he did not incur. Accordingly, the principal

amount of just compensation owed to Mr. Jenkins is $202.

III. CONCLUSION

For the reasons set forth above, the court DENIES plaintiffs’ motion for reconsideration

and AWARDS Mr. Jenkins a principal amount of just compensation of $202. In accordance

with the court’s conclusions in its trial decision, the contents of the parties’ November 16, 2020

joint status report, and the analysis set forth above, defendant is liable for the following principal

amounts of just compensation:

Property Owner Principal Amount of

Just Compensation

Gilbert Effinger $1322.00

Larry Goebel and Susan Goebel $5200.00

Owen Halpeny $1100.00

Joseph Jenkins $202.00

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In this regard, it is worth noting that defendant did not offer an expert opinion to

counter that of Mr. Matthews.

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Michael Martin and Rita Martin $9400.00

McDonald Family Farms of Evansville, Inc. $5900.00

Jeffrey Memmer $1500.00

Reibel Farms, Inc. $800.00

James Schmidt and Robin Schmidt $2500.00

Total $27,924.00

In addition, as set forth in its December 1, 2020 order, interest shall be calculated on the

principal amount of just compensation for the duration of the taking (from May 23, 2011, to

January 7, 2014) using the Moody’s Aaa rate, compounded annually, and for the period

following the taking until judgment is paid at 3.65%, compounded annually.

By no later than Thursday, June 3, 2021, the parties shall file a joint status report

indicating, in accordance with the court’s rulings, (1) the amount of interest due to each property

owner for the period spanning May 23, 2011, to January 7, 2014; and (2) the amount of interest

due to each property owner from January 8, 2014, to June 17, 2021. The court will then direct

the entry of an RCFC 54(b) judgment to dismiss the claim of Matthew Hostettler and award the

remaining plaintiffs all aspects of just compensation except for the “costs, disbursements, and

expenses” permitted under the Uniform Relocation Assistance and Real Property Acquisition

Policies Act of 1970, 42 U.S.C. § 4654(c). 10

IT IS SO ORDERED.

s/ Margaret M. Sweeney

MARGARET M. SWEENEY

Senior Judge

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In that same order, the court will stay proceedings on costs and direct the parties to file

a joint status report regarding further proceedings either seventy days after the entry of judgment

or ten days after the judgment is no longer appealable, whichever is later.

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